Tax Free Gifts: Trivial Benefits for Directors & Family

Today, you can use allowances to give away tax free gifts. But, it is important to keep your personal money and your company’s money completely separate.

Here, our team of highly trained experts tell you everything there is to know about tax free gifts, including exceptions and buying gifts for your family. Let’s take a deeper look:

Using Your Company’s Bank Card for Tax Free Gifts

If you use your company’s bank card to buy personal items or to pay your own bills, that expenditure is treated as a loan to you. The loan creates a corporation tax charge if it is not cleared within nine months of the company’s year end and may create a personal tax charge for you.

Understanding the Exceptions

However every rule has exceptions. Your company can purchase occasional unsolicited gifts for your family and you with no tax implications, subject to the following:

  • The item costs no more than £50 (VAT inclusive);
  • It is not cash or a cash voucher;
  • You are not entitled to receive the item as part of any contractual obligation; and
  • It is not provided in recognition of services that you perform for the company.

The gifts can be anything from sandals to handbags, books to booze. Linked gifts such as a monthly subscription count as one purchase so would break the £50 limit.

A director can only receive up to £300 worth of such trivial gifts tax-free each tax year, including gifts to family members.

Get More Tax and Financial Advice From Your Trusted Experts

If you are looking for tips on how to spend your money as wisely as possible, we’re here for you. Our team of qualified experts are on call to answer all of your tax questions, explaining everything there is to know about tax free gifts along the way. To get in touch, contact us today!



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